Market Conditions

Homebuilder Confidence in U.S. Increases to a Nine-Year High


Confidence among U.S. homebuilders rose in September to a nine-year high, showing the industry is gaining ground and will be a source of momentum for the economy.

The National Association of Home Builders/Wells Fargo sentiment measure climbed to 59 exceeding the highest estimate in a Bloomberg survey of economists, from 55 in August, the Washington-based group reported today. Readings above 50 mean more respondents said conditions were good.

Improvement in the job market and low interest rates spurred buying interest this month, as the group’s index of foot traffic through model homes jumped to the highest level since October 2005. Faster wage gains would provide extra momentum for residential real estate, which has seen lackluster demand from first-time buyers.

“Since early summer, builders in many markets across the nation have been reporting that buyer interest and traffic have picked up, which is a positive […]

High GSE Loan Fees Keep Buyers on Sidelines


Fannie Mae and Freddie Mac are charging excessive loan fees, according to some industry groups, who claim it is time to stop overcharging borrowers who use conventional financing to buy a home.

It’s a theme many in the industry return to in comment letters the Federal Housing Finance Agency received in response to a “request for input” on setting guarantee fees.

Fannie and Freddie hiked their loan fees in reaction to the housing crash and the staggering losses they suffered. The fee increases were also due to the failure of several private mortgage insurance companies and other insurers not living up to their obligations to pay claims.

By statute, the government-sponsored enterprises must require private mortgage insurance when the loan-to-value ratio exceeds 80%. The homebuyer pays for the insurance, which provides the GSEs with first-loss protection.

But six years later, the GSEs and the Federal […]

Sales of New Homes Unexpectedly Fall to Four-Month Low


New-home sales fell unexpectedly in July for the second month as the housing recovery makes only fitful progress.

Sales declined 2.4% to a 412,000 annualized pace, the fewest since March and weaker than the lowest estimate of economists surveyed by Bloomberg, after a 422,000 rate in June, the Commerce Department reported today in Washington.

Housing has advanced in fits and starts this year, buffeted by tight credit and slow wage growth. A shortage of skilled labor and supply-chain bottlenecks also have hindered construction even as population growth boosts demand for shelter. Bigger gains in employment and wages would stoke a more-rapid recovery.

“It’s a little bit disappointing,” said Thomas Simons, an economist at Jefferies LLC in New York and the top forecaster of new-home purchases over the past two years, according to data compiled by Bloomberg. “The new-home sales data have […]

Too big to fails not interested in mortgages


The nation’s once top mortgage lenders, the biggest banks, are a fading force in the housing economy.

FBR Capital Markets [FBRC] released its latest report on mortgage origination volumes and found that, among the big four banks, home loan lending is at its lowest level in a decade.

Origination volumes are currently at $305 billion in the fourth quarter, down from $460 billion in the quarter preceding. FBR still projects an estimated $1.3 trillion in overall originations for 2014 is achievable.

The news is a departure from estimations from the Mortgage Bankers Association. Last month, the MBA lowered its forecast for 2014 mortgage originations by $57 billion to $1.12 trillion.

“Big banks continue to shed market share with the five largest producers responsible for just over 30% of activity compared with 60% to 70% pre-crisis,” write report authors Jessica Levi-Ribner, Thomas LeTrent and Travis Potts […]

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